Jon Callaghan, co-founder of the venture capital powerhouse True Ventures, has a bold and unequivocal prediction: "We're not going to be using iPhones in 10 years," he states flatly. "I kind of don't think we'll be using them in five years." This isn't mere speculation; it's a foundational thesis guiding True Ventures' investment strategy, which is actively betting on the emergence of new human-computer interfaces to replace the ubiquitous mobile device. The firm, known for its early, contrarian investments in companies like Fitbit and Peloton, is now backing innovations such as the voice-activated Sandbar ring, signaling a significant shift in how we interact with technology.
The Smartphone's Sunset: A VC's Bold Prediction
Callaghan's argument for the smartphone's eventual obsolescence is straightforward: current phones are fundamentally inefficient as interfaces between humans and intelligence. He describes their common use for tasks like sending texts or emails as "super inefficient" and "not a great interface," noting they are "prone to error, prone to disruption [of] our normal lives." This inherent inefficiency, he believes, paves the way for a new paradigm in how we engage with digital intelligence, moving beyond the screen-centric model.
True Ventures' History of Visionary Bets
True Ventures boasts a two-decade history of identifying and investing in technologies that initially seemed unconventional but ultimately proved disruptive. The Bay Area firm, which quietly manages approximately $6 billion across various funds, has cultivated a tight network of repeat founders. This strategy has yielded impressive results: according to Callaghan, the firm boasts 63 exits with gains and seven IPOs from its portfolio of some 300 companies.
This track record includes early bets on Fitbit before wearables were mainstream, investing in Peloton after hundreds of other VCs said "no thanks," and backing Ring when founder Jamie Siminoff faced financial struggles and even the judges on "Shark Tank" turned him away. Each of these investments, Callaghan notes, represented a bet on a new, more natural way for humans to interact with technology.
Introducing Sandbar: The "Thought Companion"
The latest manifestation of True Ventures' thesis is Sandbar, a hardware device Callaghan describes as a "thought companion." More concretely, it's a voice-activated ring worn on the index finger, designed with the singular purpose of capturing and organizing thoughts through voice notes. Unlike other wearables, Sandbar isn't attempting to be a multi-purpose device like the Humane AI Pin or compete with health trackers like Oura. "It does one thing really well," Callaghan states, "But that one thing is a fundamental human behavioral need that is missing from technology today." The device is linked to an app, leverages AI, and embodies a distinct philosophy for human-intelligence interaction.
Beyond Gadgets: Investing in New Behaviors
What truly attracted True Ventures to Sandbar's founders, Mina Fahmi and Kirak Hong, was a shared vision. True's team had already spent years exploring alternative interfaces and meeting numerous founders in this space. Fahmi and Hong, who previously worked together on neural interfaces at CTRL-Labs (acquired by Meta in 2019), presented an approach that resonated deeply. Callaghan emphasizes, "It's about what [the ring] enables. It's about the behavior it enables that we will very soon realize we can't live without." This echoes Callaghan's famous line about Peloton: "It's not about the bike." For him, the bike was merely the vessel for a new behavior and community.
This philosophy of investing in new behaviors, rather than just novel gadgets, also underpins True Ventures' disciplined capital strategy. Even as AI startups command massive valuations and raise hundreds of millions, True remains focused on its strength: writing seed checks of $3 million to $6 million for 15% to 20% ownership in promising startups. Callaghan is not interested in raising billions, questioning the necessity when "You don't need that to build something amazing today."
A Measured Approach to the AI Boom
While acknowledging the immense power of the current compute wave and believing OpenAI could soon reach a trillion-dollar valuation, Callaghan expresses caution regarding the broader AI boom. He points to warning signs in the "circular financing deals" supporting hyperscalers and the projected $5 trillion in CapEx spending on data centers and chips. "We're in a very capital intense part of the cycle, and that is worrisome," he observes. However, he remains optimistic about future opportunities, believing the greatest value creation lies not in the infrastructure layer but in the application layer, where new interfaces will unlock entirely new behaviors.
The Future of Human-Computer Interaction
Callaghan's core investing philosophy is almost romantic: "It should be scary and lonely and you should be called crazy," he says of successful early-stage investing. "And it should be really blurry and ambiguous, but you should be with a team that you really believe in." Five to ten years later, the results will speak for themselves. Given True Ventures' consistent track record of identifying and backing hardware innovations that others overlooked – from fitness trackers and connected bikes to smart doorbells and now thought-capturing rings – Callaghan's prediction about the smartphone's limited lifespan warrants serious attention. The market trends support his thesis: smartphone growth is stagnant at barely 2% annually, while wearables (smartwatches, rings, and voice-enabled devices) are expanding at double-digit rates. Something fundamental is shifting in how we desire to interact with technology, and True Ventures is strategically placing its bets.
For more insights from Jon Callaghan, listeners can tune into the StrictlyVC Download podcast, with new episodes released every Tuesday.
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